Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Newsagents quitting newspapers

Mark Fletcher
October 25th, 2018 · 13 Comments

Another newsagent let me know yesterday that they are quitting newspapers. They are in a suburban shopping centre and sell 50 or less papers a day. As a sub agent, they make around 25 cents a paper.

Their decision has been brought on because of a dispute with the distribution newsagent. That was over withdrawal of services previously provided by the newsagent – returns pickup.

The dispute caused the retailer to look at numbers and at what else is purchased by the newspaper shopper and, over a month, how often newspaper shoppers returned for other purchases.

The data gathered shows that in their situation, less tham 5% of newspaper customers bought anything else in the paper purchase visit and none returned to purchase at any other time, separately.

The shop is well laid out with current gift and other offerings and compelling displays for impulse purchase.

On the evidence and considering the stress of the relationship, they made the decision. That is six retail newsagents I know of this year who have made the decision.

I am not writing here as advocacy. rather, I am noting what some are doing, and in doing this they are ahead of newspaper publishers in terms of the commercial value of a declining product. This is a KEY POINT of this post. Daily newspapers in Australia will close. Newsagents quitting the category are exercising more control over their own businesses.

The criteria for such a decision is, in my opinion:

  1. Return on floorspace.
  2. Customer value in the paper purchase visit transaction.
  3. Customer value over the long term outside the paper purchase transaction.
  4. The preferred identity of the business. For example, are papers a service that it is good for the business to offer?
  5. The ease of the supply relationship.
  6. Whether the print product fits the strategic direction of the retail business.

I am at the point of considering this decision in one of my businesses. It has been under consideration for a few months, I think we are ready to make a decision.

19 likes

Category: Media disruption · newsagency of the future · Newspapers

13 responses so far ↓

  • 1 Colin // Oct 25, 2018 at 6:26 AM

    Ditching newspapers is a no brainier for us, we have similar basket situation. But in doing so we would want to drop any reference to newsagency. That would imply dropping also unprofitable magazines, but the basket analysis there shows far more integration with other stock lines. Not easy.

    0 likes

  • 2 Graeme // Oct 25, 2018 at 7:33 AM

    Getting rid of newspapers is getting rid of opportunity. as it always it will always be.

    A newspaper customer preent a wonderful opprtunity to engage Daily.
    I believe this post is taking a step too far too soon.
    Every newspaper purchaser has a friend, a brother a sister, an uncle or if not a neighgbour and they are your only Daily (7) customer.
    50 opportunities everyday.
    Re think this one beore you do it for this introduction to acquire more sales is what all other retaiolers yearn for especially in the land of retail slide and internet rise.
    As for the 6 pointsI can see positiveness in those not negativity. I know of many stores where those six points can all be above the retail plimsoll line.

    1 likes

  • 3 pat e // Oct 25, 2018 at 7:40 AM

    Consider it every day however I am in a position of having ditched deliveries but still remain an agent as opposed to sub agent and to a degree papers are still marginally profitable to my situation.
    Had a situation yesterday however which has got me considering boycotting our local paper which turned up with a full page wrap spruiking their new digital subscriptions.
    I understand their need to have the option as their readership has been falling for some time.
    But I was outraged to think they would have the arrogance to expect us to advertise it in a prime retail space for them.
    I removed all the wraps and binned them I just hope other agents in the region did the same,If the next edition shows up the same I will be refusing to sell it .
    Sorry for the rant not exactly on point but this total disregard and lack of respect is surely another reason retailers are somewhat compelled to quit newspapers

    0 likes

  • 4 Mark Fletcher // Oct 25, 2018 at 10:21 AM

    Graeme, as a newsagent, a retailer, I disagree. Newspapers will close in Australia. There is no doubt about that among publishers. Newsagents acting at a time of their choosing for their business are exercising control, ahead of an inevitable supplier decision.

    1 likes

  • 5 Andrew T // Oct 25, 2018 at 12:21 PM

    Another reason not to visit a newsagent

    0 likes

  • 6 Andrew // Oct 25, 2018 at 12:28 PM

    I too have a similar type arrangement and have been following my paper sales closely.Your data is very accurate. These customers are ” costomers “.
    Not only do they complain the most,push in and pay with large notes and or cards but take up valuable staff time in ramming down their opinions about everything.

    6 likes

  • 7 Jonathan Wilson // Oct 25, 2018 at 7:20 PM

    As long as Murdoch is able to use his print empire to have influence in the halls of power and influence among the voting public, Murdoch is likely to continue printing papers. Especially when he has assets like Foxtel that he can use to cross-subsidize the print business.

    2 likes

  • 8 Peter // Oct 25, 2018 at 9:33 PM

    Every day I read the Aus and the SMH. Its like visiting two different universes. However, what happened in Wentwoth is a game changer as long as both universes accept this otherwise a walkover of one will occur.

    I am to close to Yass to be to honest.

    0 likes

  • 9 Graeme // Oct 27, 2018 at 10:36 PM

    Peter,
    i don’t get the last sentence -Too Close to Yass to be too honest.
    I am aware that Ruperst has a counrty estate at Yass one of many of his stop overs in the World.
    Help me out here just what is your message?

    0 likes

  • 10 Kevin // Oct 29, 2018 at 10:32 PM

    As a newspaper distributor we can see the point Mark is making, however there is a counter point. We are finding that sales are increasing at other outlets, such as independent supermarkets, at a greater rate than the decline of sales in our retail newsagency outlets. In essence we have significantly increased total sales through subagents, by adapting supply rates to the outlets which customers choose to go to for their daily newspaper. We take sell-through very seriously regardless of the type of outlet and always act to correct supply according to a tight range of returns history. However the trend is clear; the local neighbourhood newsagent is not necessarily the customers’ most preferred place at which to buy a newspaper.

    1 likes

  • 11 Mark Fletcher // Oct 30, 2018 at 5:29 AM

    Kevin, I see that too, you make a good point. Retail newsagent sales decline is due to decline in print sales and migration to other outlets. People want convenience.

    0 likes

  • 12 John // Oct 31, 2018 at 12:37 AM

    Really unbelievable …..

    “that was over withdrawal of services previously provided by the newsagent – returns pickup”

    Where’s the Publishers, why aren’t they Breaching the Distribution business?

    Does this mean that Publishers don’t want returns?

    There must be background to this by both parties.

    Collection of unsold newspapers is a basic requirement or am I missing a point here?

    0 likes

  • 13 Kevin // Oct 31, 2018 at 7:42 AM

    @Mark, its a question of whether the decline is due to a cyclical or a structural situation. Our experience so far is that around 70% of consumers aren’t and don’t want to live a digital life. The marketers need to get to these people and classic media is still an effetcive way to do this. The big structural change for newspapers was the end of classifieds and that’s already been digested by the industry. Then there is the the current phase of news vs fake news and growing perception that news from major mastheads is more trustworthy. Off course changing demographics and geographics play a big role but we dont believe that the dust is settled on the final outcome and physical newspapers will be with us in one form or another for quite a few years.

    @John, this might not be so simple. Returns are usuall picked up overnight and the retailer might not be able to, or want to, comply with the distributors collection schedule. One thing is for sure; publishers still very much want their returns back in their timeframe.

    2 likes

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